Loss on final K1

[LindaB]

Taxpayer received a final K-1 from a partnership in 2004. It included net rental real estate loss of 2500 and a net section 1231 loss of 87k. The sec. 1231 loss goes to form 4797, then to line 14 of the 1040, other gains or losses. This loss is more than other income, mostly wages. Do they lose the benefit of this 87k loss, i.e. can't carry it forward or back?

[OldJack]

The loss on line 14 is a business loss when determining if there is a 1040 Net operating loss that may be carried back or forward. The loss is therefore deducted against ordinary income and if no ordinary income in the current year it becomes a part of a NOL.

[LindaB]

The loss on line 14 is a business loss when determining if there is a 1040 Net operating loss that may be carried back or forward. The loss is therefore deducted against ordinary income and if no ordinary income in the current year it becomes a part of a NOL.

Thanks, OldJack